Carlsbad Department of Development proposes housing incentive

CARLSBAD >> The Carlsbad Department of Development has proposed an incentive plan to encourage developers to build more affordable housing.

The proposal focuses on creating housing that is more affordable than much of what is currently available by filling vacant lots within Carlsbad's city limits.

"Subdivisions are great," said Jay Jenkins, president of the Department of Development. "But this would focus on certain areas of town with lots that were never built on."

The proposal suggests two incentive rates for developers who meet certain requirements.

Any company, individual or entrepreneur building workforce housing would be offered an incentive, paid by the city of Carlsbad, of $15 per square foot up to a maximum incentive of $22,500.

The incentives would be paid to the developer, with the money coming from a city fund. The process is yet to be decided.

"At the end of the day, there needs to be more housing," said Mark Schinnerer, vice president of the board for the Department of Development. "We need people at the lower end of the workforce to be able to afford something to rent or buy."

To qualify for the workforce housing incentive, Schinnerer said, a developer would have to agree to set rent or payments within a certain range.

As of right now, the Department of Development is estimating that range at $750 to $850 per month, and developers would have to agree to keeping rates at that level for two years, Schinnerer said.

Any housing built above that range, called market rate, would still receive the monetary incentive, but at the lower rate of $7.50 per square foot.

To qualify for either incentive, a builder would have to complete an application process, have it approved, and provide quarterly reports to prove that they are still meeting requirements.

Many steps must still be taken before this proposal could go into effect.

The city of Carlsbad's Local Economic Development Act would have to be modified and approved by the City Council to include housing as an economic development activity.

The Local Economic Development Act is an ordinance that names exceptions to state anti-donation laws, which keep cities from donating to or aiding private enterprise.

City officials will meet with Department of Development officials to discuss the proposal, and the city will conduct its own legal and budgetary reviews, said Steve McCutcheon, city administrator.

McCutcheon said it would take approximately 45 to 60 days to review the proposal.

"Then, depending on what it looks like, we'll work with the mayor to see what needs to be done with it after that," McCutcheon said.

Jenkins said that, in the end, many of Carlsbad's issues come back to housing, which is why the proposal is important.

"It (housing) has been such a huge issue," Jenkins said. "Every time we bring up a subject, like employment, it all comes back to housing and the lack thereof."